Warburg Pincus LLC is planning to extract a payout from Consolidated Precision Products Corp. with the use of debt, according to a person with knowledge of the transaction.
UBS AG is arranging $902 million of loans for the company, which will be used to pay a dividend to its private-equity owner Warburg and refinance a $185 million second-lien term loan, said the person, who asked not to be identified because the transaction is private.
Consolidated Precision, a maker of highly-engineered components for the aerospace and defense markets, borrowed $700 million in loans last year to help fund its purchase of Esco Corp.’s Turbine Technologies Group, according to data compiled by Bloomberg. Holders of the second-lien debt that was obtained under that deal will be repaid at 103 cents on the dollar, according to the person.
The financing will consist of a $537 million first-lien term loan maturing in 2019, a $240 million, 7 1/2-year second-lien loan and a $125 million revolving credit line due in 2017. The bank will host a meeting with lenders on Oct. 17, the person said.
Ed Trissel, a spokesman for Warburg Pincus, declined to comment on the dividend or financing.
Under a revolver, money can be borrowed again once it’s repaid; in a term loan, it can’t.